Wyndham

Wyndham v Square One Dev.

Case Number: 6:20-cv-00643

Last Updated: December 3, 2020

Status

At issue, pending a ruling on Wyndham’s motion to strike Square One’s affirmative defenses.

Location

USDC, FL Middle District

Presiding Judge

Hon. Roy Dalton

Date Filed

09/30/2019

Highlights

The court granted the exit company’s motion to compel Wyndham to respond to discovery seeking Wyndham’s theory of damages.

Related:
Square One Development Group v. Wyndham Destinations, Inc. and ARDA, US District Court, Eastern District of Missouri, Case 4:20-cv-01366, in which Square One alleges that Wyndham violated the Lanham Act, libeled Square One with its advertising, and tortiously interfered with Square One’s contracts.

Case Posture

Claims:

Wyndham sued Square One, a Missouri timeshare contract cancellation company, in the US District Court, Florida. Wyndham’s operative Second Amended Complaint alleges tortious interference and violations of the Lanham Act and Florida Deceptive and Unlawful Trade Practices (FDUPTA).

(Square One subsequently filed its own lawsuit against Wyndham in Missouri, similarly alleging Lanham Act violations and tortious interference, in addition to a libel claim.)

Posture:

The case is at issue. The Court (Judge Dalton) ordered Mediation to take place by 3/19/21, dispositive motions by 4/2/21, and set a Jury trial for 10/12/21.

Summary:

On 9/30/19, Wyndham brought this suit against Square One and another defendant, TS Elimination. Wyndham alleges that defendants falsely advertise the ability to cancel timeshare contracts between Wyndham and owners of Wyndham timeshares, and after taking fees, instructs the owners to default their timeshare obligations. Wyndham alleges that the defendants refer the Wyndham owners to third parties attorneys such as the Montgomery Law Firm and CLS, Inc., who “do nothing” other than allow the timeshare interest to go into foreclosure. Wyndham alleges that the owners could have breached their contracts with Wyndham at no charge without Defendants’ assistance and that Defendants services are “illusory” and “a scam.” Wyndham concedes that Defendants at times negotiate a deed-in-lieu on behalf of the Wyndham owners, however, Wyndham alleges that Defendants fail to inform the Wyndham owners that the consequence of doing so has “substantial negative impacts” on the owners’ credit.

Additionally, Wyndham alleges that Square One misrepresents the existence or cost of Wyndham’s putative voluntary surrender program, Wyndham Ovation Program®. Wyndham further alleges that Square One employees call Ovation pretending to be the Wyndham owner. Wyndham alleges that its Ovation Program® “is available to assist Wyndham Owners who may wish to legitimately terminate their timeshare ownership with Wyndham.

Wyndham seeks actual and punitive damages, disgorgement, attorney fees, and injunctive relief.

In its answer, Square One denies Wyndham’s allegations and responds that Wyndham fails to state any of its claims, and that Wyndham’s alleged damages are the result of Wyndham’s deceptive practices directed at Wyndham timeshare owners including false, misleading, and fraudulent and marketing tactics; and their own deceptive and unfair trade practices including not making destination accommodations available; charging excessive fees not referenced in the contract; failing to provide promised ancillary services such as cleaning and housekeeping; and illegally denying their consumers the ability to cancel their contracts. Square One alleges that it provides Wyndham owners with strategies to navigate Wyndham’s “specious exit program minefields” when they desire to cancel their ownership. Square One further alleges that Wyndham’s touted voluntary surrender program is deceptive, and is in reality used as an opportunity to upsell owners wishing to exit.

Notable events: On 6/19/20, the Court ordered Wyndham to support its claimed damages. [38]

Related: On 7/24/20, Square One, represented by Michael Sokolik, sued Wyndham and the American Resort Development Association (ARDA) in Missouri state court, alleging libel, tortious interference, and violation of the federal Lanham Act (false advertising). Square One alleges that ARDA falsely advertises that Square One engages in fraud. As for Wyndham, Square One alleges that “[i]f timeshare owners, including Square One’s customers, knew the truth about Wyndham Destinations’ illusory and fraudulent advertising and exit programs, they would not breach and/or terminate their contracts with Square One.” Square One seeks actual and punitive damages, disgorgement, attorney fees, and injunctive relief. Square One Development Group v. Wyndham Destinations, Inc., et al., removed to 9/25/20 to US District Court, Eastern District of Missouri, Case 4:20-cv-01366.

Selected Events:

8/31/20 – Wyndham filed a motion to strike Square One’s Affirmative Defenses. [52]

———–

6/19/20 – Order entered granting Square One’s Motion to Compel Wyndham to Support Its Claimed Damages [38]

“Plaintiffs’ Supplemental Rule 26 Disclosures claimed ‘actual damages’ of $318,326.33, as the ‘[a]ggregation of unpaid loan balances’ outstanding on Wyndham timeshare owners’ mortgages, punitive damages in the amount of approximately $10,000,000, and an unknown amount of disgorgement damages, corrective advertising damages, and attorneys’ fees. … Defendant contends that Plaintiffs still have not provided it with the “the actual documentation underlying its claimed damages and calculations, such as the mortgage instruments, correspondence regarding the Owners’ payments status, or documentation of any default or breach.’ [ ] The Court finds that Defendant is entitled to this information under Federal Rule of Civil Procedure 26(a)(1)(A)(iii). To the extent Plaintiffs have not already provided Defendant with documents that support its damages calculation, it is required to do so now.

———–

4/13/20 – Order entered Severing Defendants, denying Square One’s Motion to Dismiss [5]

After TS Elimination filed a notice of bankruptcy, the Court severed the case to permit Wyndham to proceed in a newly numbered action against Square One. Both defendants had previously filed motions to dismiss, arguing improper venue, or in the alternative, inconvenience of the parties and witnesses. The Court rejected Square One’s improper venue argument because Wyndham successfully argued that a substantial part of the events gave rise to the claim in Florida. Similarly, Square One’s inconvenience argument failed because the Court refused to shift inconvenience from the defendants to the plaintiffs by transferring the case to Missouri.

———–

1/10/20 – [2] Case Management Order entered
The Court ordered the parties to file a Mediation report by 3/19/21, and set a deadline for dispositive motions by 4/2/21. The Court scheduled a Jury Trial to take place 9/6/21.

Related:

Square One Development Group v. Wyndham Destinations, Inc. and ARDA, removed on 9/25/20 to US District Court, Eastern District of Missouri, Case 4:20-cv-01366, in which Square One alleges that Wyndham violated the Lanham Act, libeled Square One with its advertising, and tortiously interfered with Square One’s contracts.

Parties

Plaintiffs:

Wyndham Vacation Ownership, Inc., and affiliated entities

Plaintiffs’ counsel:

Shutts & Bowen, LLP.

Defendants:

Square One Development Group, Inc.

Defendants’ counsel:

Samuel Dubbin, Dubbin & Kravetz, LLP

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